What is council tax?

Council tax, as the name would suggest, is paid to your local council, and helps fund the services that it provides, for example, having your rubbish collected, road repairs and street lighting. How much you pay depends on which band your home falls into, which is determined by the value of your home and the number of people living there.

Click here for a useful guide to the bands and how to work out which one you’re in.

It’s very important that you pay your council tax

There are some bills that can cause you serious problems if you do not pay them, which is why it’s a good idea to put these first. One of these is council tax, and it’s really important you pay this – so much so that it’s classed as a priority payment.

What action can my council take?

If you don’t pay your council tax bill, there are certain steps that your council will take to try and recover the money they’re owed. We’re going to explain these steps below so you know what could happen, but while you’re reading them it’s important to remember that you can stop the matter being taken any further if you contact your local council to explain the situation and set up a new payment arrangement.

When you miss a council tax payment, you’ll first be sent a reminder notice informing you that it’s overdue. This will state how much you owe and how long you have to pay.

The next step will probably be a further notice, which again will tell you how much you owe and give you a timeframe to pay.

At some point the council will send you a final notice letter, which sets out exactly when they want you to pay the balance, and they may also take away your right to pay your outstanding bill in instalments.

If the bill continues to go unpaid the council can apply to the Sheriff Court for a Summary Warrant. The Summary Warrant is a certificate from the court which states the amount of tax that you owe, and at this point the amount will have gone up as 10% is automatically added when a Summary Warrant is issued. You can avoid going to court if you pay the amount in full as well as any court costs before the date stated on the letter.

If you get a Summary Warrant and you still don’t pay, the council can get a Charge for Payment from the court. This gives them the power to take various steps to get the money, including:

• deducting the money from your wages

• deducting the money from your benefits

• making you sell your house and using the money to pay the tax

• sending enforcement agents (bailiffs) round to your home

• applying to make you bankrupt.

If none of the above work and your balance is still outstanding, the council can ask the court to start proceedings to send you to prison. However, this only happens in rare cases and when there is no other way forward.

What to do if you’re in arrears

As we said before, if you are in council tax arrears it doesn’t have to get to the stage where your council is trying to enforce the debt. It is possible to stop this from happening and the earlier you try to tackle the issue the better.

First of all, make sure that you’re not putting anything less important, like payments for unsecured loans or credit cards, ahead of your council tax. Of course, you should always try and pay everything if possible, but if it comes down to a choice, put your council tax first.

As soon as you realise you’re not going to be able to afford your council tax, you should get in touch with your council and let them know. They may allow you to catch up in instalments or to pay later on in the year, giving you more time to get the money ready.

It is sometimes possible for you to get a reduction in your council tax - by up to 100%, depending on your circumstances. Make sure you tell your council if you fall into any of the categories below:

• Someone living in your house has a disability.

• You’re the only adult living in the property.

• You live with people that don’t need to pay council tax, like students or student nurses.

• If you’re on a low income with less than £16,000 in savings.

• If you receive Income Support, Pension Credit, Jobseeker’s Allowance or other benefits.

A debt solution could be the answer

The route of the problem could be that you’re not able to keep up with your council tax because of the other debts that you have to pay off as well. If this is the case, you may need to start a debt solution.

A debt solution can lower (or in some cases suspend) your payments towards your unsecured debts, making you better able to afford the other essential expenses in your life, like your council tax. There are a range of out there – it would just be a case of finding the right one for your circumstances.

The best way to do this is to seek professional advice, and you can do that by using one of the options to the left of this page. Our trained advisors have lots of experience talking to people dealing with problem debt and can recommend the very best solution for you.

We hope you’ll be happy with our service but, if you’re not, we want to hear from you so we can try to put that right. Read here for information about our Complaints Procedure and about your right to refer a complaint to the Financial Ombudsman Service.

Your payments into a Debt Management Plan are protected and compensation could be available from the FSCS if there are any shortfalls in funds held on a customer's behalf.

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